The SEC requested Solana ETF issuers to amend their S-1 registration statements in mid-2025, focusing on in-kind redemption language and staking provisions. The agency approved spot SOL products in October 2025, and multiple funds began trading on U.S. exchanges. The regulatory shift moved from approval gatekeeping to operational engineering of how these funds create and redeem shares while staking underlying assets. This marked the first time a U.S. spot crypto ETF received authorization to earn yield on holdings through staking. The change established a structural template for proof-of-stake crypto products, with Franklin Templeton, Bitwise, Fidelity, Canary Capital, CoinShares, Grayscale, and VanEck submitting amended filings before the October 10, 2025 deadline.
SEC Requested S-1 Amendments for In-Kind Redemptions and Staking in Mid-2025
The SEC asked prospective Solana ETF issuers to amend and refile their S-1 registration statements before the end of July in mid-2025, according to CoinDesk, citing people familiar with the matter. The agency specifically requested that issuers modify the language around in-kind redemptions and outline their approach to staking. That request came after the automatic approval of the REX-Osprey SOL and Staking ETF, which began trading under the Investment Company Act of 1940. The final deadline for the agency to approve or deny the spot Solana ETFs was October 10, 2025, but the regulator moved well ahead of that timeline and approved the funds in October 2025.
In-Kind Redemption Mechanics Reduce Fund Costs and Tracking Error
In-kind redemption allows authorized participants to exchange ETF shares directly for the underlying asset rather than settling in cash. Cash-only redemptions force the fund to sell the underlying asset on the open market to meet redemptions, which can create tracking error and widen spreads. In-kind transactions eliminate that step, reducing costs for both the fund and its investors. The SEC approved in-kind redemptions for spot Bitcoin and Ethereum ETFs earlier in 2025. Grayscale's Solana Staking ETF subsequently amended its Authorized Participant Agreement with Jane Street Capital to allow in-kind creations and redemptions.
Staking Provisions Allow SOL ETFs to Generate Yield Above 7%
No U.S. spot crypto ETF had been allowed to earn yield on the asset it holds until the Solana products broke that barrier. Bitwise's BSOL stakes 100% of its SOL holdings through Helius, a leading Solana validator, targeting average annual staking rewards above 7%. Grayscale's GSOL has a staking program with a 23% fee on gross staking consideration after an initial waiver period, according to its SEC filings. Morgan Stanley's amended S-1 filing in June 2026 added a detailed staking framework, stating the trust may stake up to 100% of its SOL holdings subject to liquidity needs, regulatory considerations, and redemption activity. The filing priced the fund at a 0.14% annual sponsor fee.
Slashing risk is the key regulatory concern. If a validator misbehaves or goes offline, a portion of the staked SOL can be destroyed by the protocol. For an ETF, that creates a scenario in which the fund's net asset value could decline not because of market movement but because of validator performance. Custodians retain control of private keys, and staking providers have no authority to transfer or withdraw assets.
Solana ETFs Attracted $1.14 Billion in Cumulative Net Inflows
Solana ETFs have attracted approximately $1.14 billion in cumulative net inflows, while XRP ETFs have drawn $1.49 billion, according to TokenPost data. XRP spot ETFs launched in November 2025 and have attracted $1.25 billion since their debut, according to Ainvest. Bloomberg Intelligence analysts James Seyffart and Sharoon Francis reported that early Solana ETF demand is being driven largely by crypto-native institutional capital rather than broader institutional adoption. XRP ETFs show a contrasting profile: only about 16% of assets are tied to 13F filers, with the rest likely held by retail investors.
Bitwise's BSOL manages roughly $760 million in assets under management and led all Solana ETF launches with $56 million in first-day trading volume, according to Helius data. Bitcoin ETFs experienced roughly $2.6 billion in net selling year-to-date through mid-June 2026, per CryptoQuant data cited by MarketWatch, while the altcoin ETF categories continued building their first billions.
Approval Established Proof-of-Stake ETF Template for Future Products
The approval of spot Solana ETFs confirmed that proof-of-stake assets can receive the same regulatory treatment as proof-of-work assets for ETF purposes. It established that staking within an ETF structure is permissible, subject to custody and disclosure requirements. The Bitwise spot Dogecoin ETF remains under active SEC proceedings, according to Coinpedia. DOGE spot ETF flows returned to flat after brief outflows. Applications for ETFs tracking assets such as XRP and DOGE were also under consideration alongside Solana during the 2025 review cycle.
CLARITY Act Entered Senate Calendar June 1, 2026
The CLARITY Act entered the Senate calendar on June 1, 2026, after a bipartisan 15-9 committee vote. The staking template set by Solana ETFs remains the operative framework, and issuers are competing on fees, validator selection, and custody.
FAQ
What did the SEC request from Solana ETF issuers in mid-2025?
The SEC asked prospective Solana ETF issuers to amend and refile their S-1 registration statements before the end of July in mid-2025, specifically requesting modifications to language around in-kind redemptions and outlining their approach to staking, according to CoinDesk citing people familiar with the matter.
How much have Solana ETFs attracted in cumulative net inflows?
Solana ETFs have attracted approximately $1.14 billion in cumulative net inflows, according to TokenPost data, with Bitwise's BSOL managing roughly $760 million in assets under management and leading all Solana ETF launches with $56 million in first-day trading volume according to Helius data.
What staking yields do Solana ETFs target?
Bitwise's BSOL stakes 100% of its SOL holdings through Helius, targeting average annual staking rewards above 7%, while Morgan Stanley's amended S-1 filing in June 2026 stated the trust may stake up to 100% of its SOL holdings at a 0.14% annual sponsor fee.
